Yale Drops Sinopec As Harvard Holds On

While Harvard continues to hold shares in firms currently operating in Sudan, Yale announced yesterday that it will divest from seven oil companies that it deems partly responsible for funding the Sudanese government.

The Yale Corporation, the school’s governing board, reached the decision at a Feb. 11 meeting after an advisory committee of students, faculty, and staff recommended divestment.

“The time-honored principles that Yale observes as an ethical institutional investor have guided us to take this strong action,” Yale President Richard C. Levin said in a statement.

Yale’s announcement follows similar moves last year by colleges and universities such as Stanford, Amherst, and Dartmouth. Harvard announced this past April that it would divest from PetroChina, a subsidiary of the Chinese National Petroleum Corporation (CNPC), after pressure from students and some faculty members. But Harvard continues to hold a stake in a second Beijing-based oil company, Sinopec, which also does business in Sudan.

PetroChina and Sinopec were both listed among the seven companies targeted by Yale’s divestment move yesterday.

According to documents released by the federal Securities and Exchange Commission, Harvard held 134,050 shares of Sinopec as of the past calendar year. If Harvard has retained this stake in the company, the shares would be worth $8.2 million as of the close of the New York Stock Exchange yesterday.

Harvard’s SEC filings indicate that the University does not own shares in the other five firms targeted by Yale’s divestment move.

However, Harvard is not required to report holdings in foreign exchanges in its SEC filings.

In a statement, Yale announced that the decision to divest was based on the conclusion that oil revenues play a major part in supporting the dictatorial African government.

“As the source of such revenue, the companies are presumed to be committing ‘grave social injury’ by providing substantial assistance to the perpetrators of genocide,” the Yale statement said.

Both the U.S. House of Representatives and the Senate declared in July 2004 that the Sudanese government violated international laws against genocide in Darfur.

Yale’s move could increase pressure on Harvard to cut its ties to Sinopec.

Eric Reeves, a professor at Smith College who has been on leave since 1999 as an activist for involvement in Sudan, said, “I think Harvard is to be commended for having led the way in the divestment campaign, but it’s time for them to eliminate their investment in those companies that continue to sustain a genocidal regime.”

“Amherst’s divestment and Yale’s divestment this month oblige Harvard to rethink the extent of the divestment,” he said.

While PetroChina’s involvement in Sudan was well-publicized, the extent of Sinopec’s activities are not as clear.

A Washington Post reporter, Peter S. Goodman, wrote in an e-mail to The Crimson last spring that “Sinopec’s role in Sudan is clearly not as great as CNPC’s”—a reference to PetroChina’s parent company.

“Sinopec is essentially a contractor, whereas CNPC actually owns the lead shares in the consortium that runs Sudan’s oil patch,” Goodman wrote.

Sinopec is in the process of building a pipeline from the Melut Basin of southern Sudan to a Red Sea tanker terminal, according to an article by Goodman in the Washington Post from December 2004.

A report from Reuters in October 2004 said that Sinopec bought a six percent share of two oil blocks in the eastern Upper Nile region of Sudan.

Yale, in explaining its decision to divest, said in a statement yesterday that the companies targeted by yesterday’s divestment move were given an opportunity to explain their actions in Sudan.

Stanford’s divestment from Sudan-related firms also targeted a Russian-based oil company, Tatneft. At the end of the last calendar year, Harvard owned 48,100 shares of Tatneft, according to SEC fiings. That stake would be worth approximately $4.5 million at the close of trading yesterday.

Amherst’s divestment last month targeted 19 companies, including Tatneft as well as at least three other stocks that Harvard still owns—Swedish telecom giant Ericsson, energy firm Royal Dutch Shell, and oilfield service provider Schlumberger.

—Staff writer Cyrus M. Mossavarahmani can be reached at crahmani@fas.harvard.edu.